Punjab-Haryana High Court
Raj Singh vs The State Of Haryana And Another on 22 February, 2012
Author: Rajiv Narain Raina
Bench: Rajiv Narain Raina
CWP No.13402 of 2011 1
In the High Court for the States of Punjab and Haryana at Chandigarh
...
Date of decision:22.2.2012
Raj Singh ..Petitioner
Versus
The State of Haryana and another ..Respondents
Coram: Hon'ble Mr. Justice Rajiv Narain Raina
Present: Mr.G.S.Sandhu, Advocate for the petitioner
Mr.K.C.Bhatia, Addl.A.G., Haryana for respondent no.1
Mr.Pankaj Gupta, Advocate for respondent no.2
..
1. To be referred to the reporters or not?
2. Whether the judgment should be reported in the
digest?
Rajiv Narain Raina,J (Oral)
Challenge in this petition is to an order dated 8.6.2011 (Annexure P-
3) passed by respondent no.2-Chief Executive Officer, the Hisar-Jind Cooperative Milk Producers' Union Ltd., Jind (hereinafter referred to as "the HJCMPUL"), exercising the powers of the Registrar, Cooperative Societies, Haryana. Vide this impugned order, the petitioner has been removed as Director of the HJCMPUL. This order has been passed on the premise that the petitioner has ceased to be Chairman of the New Padana Milk Producers' Cooperative Society Ltd., Padana, District Jind (hereinafter referred to as "the New Padana Society").
To understand the controversy raised in this petition, it would be apposite to first notice the order dated 10.11.1989 (Annexure P-2) issued by the Haryana Government, Cooperation Department in exercise of the powers conferred by Section 3 of the Haryana Cooperative Societies Act, CWP No.13402 of 2011 2 1984 (hereinafter referred to as "the Act") appointing the persons specified in column 2 of the Schedule to assist the Registrar, Cooperative Societies, Haryana and further conferring on them the powers of the Registrar, Cooperative Societies, exercisable by the latter under the Act and the rules as specified in columns 3 and 5 thereof. In Sr.No.8 of the Schedule, the Project Officer/Chief Executive Officer, Haryana State Dairy Development Cooperative Federation Ltd. (VITA) has been authorized to exercise jurisdiction of the Registrar Cooperative Societies only "within their territorial jurisdiction in respect of Primary Cooperative Milk Societies". It is argued by Mr. Sandhu, learned counsel for the petitioner that in view of Annexure P-2, the Chief Executive Officer would have no power in respect of Central Cooperative Society i.e. Haryana State Cooperative Supply Marketing Federation Ltd. (HAFED) and therefore, the Chief Executive Officer, HJCMPUL has no jurisdiction to remove the petitioner from the elected membership of the Board of Directors of the HJCMPUL as done vide the impugned order dated 8.6.2011 (Annexure P-3). The impugned order cites Clause 18.1 (i) of the bye-laws of the HJCMPUL as authorizing him to do so. Clause 18 deals with the Cessation from Membership of the Primary Society. Sub-clause (i) of Clause 18 lays down, inter-alia, that a person would cease to be a member of the Board if he ceases to be a Chairman of the Society he represents. The issue involved in fact, arises out of a previous action of the Chief Executive Officer in removing the Managing Committee of the New Padana Society (Primary Society) vide order dated 6.6.2011 in purported exercise of the powers of Registrar, Cooperative Societies under Section 34 of the Act. It is alleged that order was made on false and flimsy grounds and the same has been challenged by the Managing Committee of the Society in an appeal. It is not disputed that New Padana Society is CWP No.13402 of 2011 3 a body of HJCMPUL which is a Central Society. When there were elections to the Board of Directors of the Central Body, the petitioner was authorized by the Primary Society in accordance with the provisions of Section 21 of the Act through a resolution duly passed to participate and cast his vote on his behalf in the election of the Union. The petitioner contested the election of the Central Society and was declared elected to the Board of Directors in an intra Board election. He was elected as Chairman of the Central Society w.e.f. 22.1.2010. Mr. Sandhu, learned counsel for the petitioner relies on Section 21 of the Act which deals with election of Directors to the Central Society. Section 21 of the Act reads as under:-
"21.Manner of exercising vote:- Every member of a co- operative society shall exercise his vote in person and no member shall be permitted to vote by proxy:
Provided that-
(a) a co-operative society which is a member of another co-operative society may, subject to the rules, appoint one of its committee members through a resolution of its committee to vote on its behalf in the affairs of the other society;
(b)In case of a primary society which is a member of another co-operative society may, subject to the rules, appoint one of its members to vote on its behalf in the affairs of the other society."
On election to the Central Society, the petitioner gained an independent status. According to Mr. Sandhu, learned counsel for the petitioner, removal of Managing Committee of the Primary Society would have no effect on his election as Director to the Central Society, and CWP No.13402 of 2011 4 therefore, the Chief Executive Officer was vested with no jurisdiction to remove the petitioner from the Central Society vide the impugned order. The pendency of the appeal of the Managing Committee would have no impact on the impugned order nor is it subject matter of this writ petition nor does the pendency of the appeal save or destroy the impugned order. Mr.Sandhu, learned counsel further submits that his argument in challenge to the impugned order can be tested on Rule 28 of the Haryana Cooperative Societies Rules, 1989 (herenafter referred as "the Rules") which deals with removal from membership of a Committee. Rule 28 reads as under:-
"28.Removal from membership of Committee. Section 131(2)(x)- (1) A member of the Committee shall cease to hold office as such if he:-
(a)Continues to be in default in respect of any sum due from him to any Cooperative Society for a period of three months;
(b)Ceases to be a member;
(c ) is declared insolvent;
(d)becomes of unsound mind;
(e) is convicted of an offence involving dishonesty or moral turpitude; or
(f)becomes subject to any of the disqualifications specified in rule 27.
(2)The Committee shall inform the Registrar that a member has incurred the disqualification under sub-rule (1) and as such is liable for removal from the office. (3)On the receipt of information of a Committee under sub-rule (2), or the application of any member of the CWP No.13402 of 2011 5 Society or suo motto, the Registrar may order the removal of the member from the office after giving an opportunity to hear the Committee and the member concerned."
Rule 28 (f) brings within the mischief of removal of a member who becomes subject to any of the disqualification specified in Rule 27. This takes me to Rule 27 which reads as under:-
"27. Disqualification for membership of committee. (Section 131(2) (xiii). No person shall be eligible for election as member of the committee if-
(a)he is in default to any Cooperative Society in respect of any sum due from him to the society or owes to any Cooperative Society an amount exceeding his maximum credit limit;
(b)he has directly or indirectly any interest in any contract to which the Cooperative Society is a party except in transactions made with the Cooperative Society as a member in accordance with the objects of the society as stated in the bye-laws;
(c) he has at any time during a period of one year prior to the date of scrutiny of nomination papers, engaged any private business, trade or profession of any description which is carried on by the society;
(d)[he has been convicted of] any offence involving dishonesty or moral turpitude during a period of five years prior to the date of scrutiny of nomination papers;
(e)he is subject to any of the prohibitions contained in rule 28;
(f)he has, during a period of 12 months preceding the CWP No.13402 of 2011 6 date of filing of nomination papers, remained inactive as member or has been carrying on through agencies other than the cooperative society of which he is a member, the same business as is being carried on by the cooperative society;
(g)he is a member of an elected committee of any cooperative society which has ceased to function or which has not fulfilled its objects as stated in its bye-
laws and has been included in the list of "D" class societies maintained by the Registrar or is a member of an elected committee of a society which is under winding up process;
(h)he has ceased to be a member of a member of an elected committee of any cooperative society within a period of one year, preceding the date of inclusion of such society in the list of "D" Class societies maintained by the Registrar or in the operation of order of winding up of such society such section 105 of the Act;
Provided that nothing in Clauses (g) and (h) shall be deemed to debar any person from seeking election if the society under winding up process of which he is a member, is a society with limited liablity and that person discharges all his liabilities including liability as surety, if any, in relation to such a society within two months from the receipt of assessment orders;
(i)he is a paid employee of the cooperative society provided that this shall not apply in case of producers society.
(j)he incurs any other disqualification laid down in Act, CWP No.13402 of 2011 7 Rules and the bye-laws of the society.
Explanation.- For the purpose of clause (f), a person shall be deemed to be inactive as a member of a society where he has not participated in the activities aimed at achieving the objects for which the society has been registered."
Rule 28 deals with Central and Apex Society. The procedures laid down in Rules 28(2) and (3) do not stand specified in this case since the petitioner was not liable for removal under Rules 27 or 28 or for that matter for violation of principles of natural justice, right preserved under sub-rule (3) of rule 28.
Mr.Sandhu, learned counsel for the petitioner argues that there is no automatic cessation consequent upon the removal of Managing Committee of Primary Society. In support of the submission, Mr. Sandhu, learned counsel for the petitioner relies upon a Full Bench decision of this Court rendered in Kulwant Singh vs. State of Punjab and others, 1999(2) PLJ 333 to contend that there is a clear distinction between an individual ceasing to be a member of the Managing Committee and ceasing to be a member of the Primary Society. The Full Bench has opined that after election of Director of Apex Society in zonal meeting of representatives of several Primary Societies, he is to represent such societies. He does not represent as President of particular society. His removal from Directorship is not dependent upon his continuance as President of the Primary Society. It is only on account of disqualifications earned as prescribed, that he can be removed from Directorship of the Apex Society. It has been held by the Full Bench as under:-
"34.The cumulative but harmonious reading of Section 19(2), Clause 10(1) of Appendix "C" as per Rule 23, Rules 14, 18, 25 and 26, Model Bye-laws 5 (a), 6, 15, 33 and 35 read with Bye-laws, 34, 36 and 39 of the Nawan Shahr Central Cooperative Bank Limited is a clear precept to the analysis arrived at by us above. CWP No.13402 of 2011 8 Legally unaltered membership of Primary Society of an individual is the very foundation of cause and consequences under these relevant laws, unless the Bye-laws validly framed in consonance with the Act otherwise provide. The loss of the office in the Managing Committee of a Primary Society per se will not become disqualification against the individual in relation to his status in the Managing Committee of a Central or Apex body. It is cessation of basis membership which could result in inviting order under Rule 26(f) of the Rules in the facts and circumstances of the present case. It appears to us that authorities have acted on wrong assumption of law, its applicability and obviously with some element of bias.
35.The petitioner in the present case could not have earned disqualification, as stated in the impugned order because he was a member of the Primary Society in July, 1991 when the election to the Central Bank was held. At that time, he was a member of the Primary Society and could have been empowered by the Managing Committee by means of the resolution to attend and participate in the meeting and election of Central Bank. The fact that he ceases to be the member or Vice-President of the Managing Committee of the Primary Society could not be sustained in law as a ground for cessation of his status as Director of the Central Bank."
In the present case, there is the Central Society in question. Mr. Sandhu, learned counsel for the petitioner also relies upon a Constitution Bench decision of the Hon'ble Supreme Court in the case of U.P. Cooperative Federation CWP No.13402 of 2011 9 Ltd. vs. State of U.P. 1973( 1 )SCC 398, to contend that only the Managing Committee had been removed and it was not that the Primary Society had ceased to exist or be a member of the Central Society. The membership continued. Therefore, cessation of membership of Managing Committee would not lead to automatic cessation of the Central Society. This decision rendered in the context of U.P. Cooperative Societies Act (1966) has been pressed by Mr. Sandhu, learned counsel only on the issue of automatic cessation.
On the point of non-hearing the petitioner before passing of the impugned order, the learned counsel has relied on the judgment of the learned Single Judge of this Court rendered in the case of Ugar Singh vs. State of Punjab and others, 1976 PLJ 95. Mr. Sandhu, learned counsel would also reply upon a Division Bench judgment of this Court in the case of Lakha Singh vs. Registrar, Co-operative Societies, Punjab and others, 1972 PLJ 363 which dealt with Rule 26 of the Old Punjab Co-operative Societies Rules, 1963 which are in pari materia to the present Rule 28. He relies on paragraphs 15 and 17 of the judgment which can be quoted with profit as under:-
"15...The powers to take action under rule 26 have not been conferred upon either the Joint Registrars, or the Deputy Registrars or the Assistant Registrars. The question now to be seen is whether rule 26 impliedly contemplated that some authority should give a prior finding about the facts on the basis of which it can be said that a member ceased to be a member or not. The matters relating to the election of the members of a committee of a co-operative society and the rights of the members to manage the affairs of the society are rights which may rightly be regarded as analogous to the rights of franchise. Any infringement of such rights by the executive, save in accordance with the provisions of the statute and the Rules on the subject, CWP No.13402 of 2011 10 is to be looked upon with extreme disfavour. In interpreting such provisions, which have the drastic result of denying an elected member his right to manage the affairs of a primary society and in some cases of managing the affairs of the Central and Apex Societies, the Courts should lean in favour of elected members......
17.Section 27 of the Act, no doubt, contemplates the taking of disciplinary action by the Registrar against a Committee or its member, but a member would cease to be a member within the meaning of rule 26 only if he becomes clothed with some of the infirmities mentioned in that rule. In substance, removal from membership and ceasing as a member have the same effect for an elected person. When the legislature in its wisdom has conferred the power of removal on the Registrar only, then it would be undesirable to hold that the said authority was not competent to take action under rule 26. We are of the view that even when a declaration is sought to be given regarding a member under rule 26, the matter must be decided by an authority invested with the powers of the Registrar."
Mr.Bhatia, learned Addl.A.G., Haryana has made no meaningful arguments in defence of the order.
Mr. Pankaj Gupta, learned counsel for respondent no.2 has filed written statement and relied only on the show cause notice served by his client on the members of the Primary Society, exercising the powers of Registrar, Co- operative Societies. He has highlighted the charges against the Managing Committee which led to its removal. I would only say that those charges are CWP No.13402 of 2011 11 subject matter of appeal and this Court is not called upon to abort the appeal which will be decided on its merits. However, it has no impact on the impugned order, not saves it. The impugned order is an independent order, dethroning the petitioner unceremoniously under Clause 18.1 (i) of the bye-laws of the HJCMPUL.
In the light of the above discussion, this Court is of the considered view that the Chief Executive Officer has passed an entirely illegal and deliberately perverse order without jurisdiction which unlawfully throws out a person duly elected to the Central Society and, that too, by back stabbing. Consequently, the writ petition is allowed. The order dated 8.6.2011 (Annexure P-3) is hereby quashed. Respondent no.2 is burdened with cost of Rs.10,000/- to be personally paid by him to the State Legal Services Authority, Haryana within a period of one month from the date of receipt of a copy of this order. A person holding public office is expected to know, nay not the limits of his power and jurisdiction but the limitations of exercise of such power. That would promote the rule of law.
(RAJIV NARAIN RAINA) JUDGE 22.2.2012 MFK